I did mention I read Krugman, right? So I noticed, like practically everybody else, including the mainstream media who seem to be giving him more attention just lately, that he's been critical of what I call the "comping the whales and letting them gamble with house money"/valuing and buying "toxic assets" (I meant legacy loans! I did!) part of the Geithner plan, and his general criticism that the Obama strategy toward stimulus isn't going far enough. I couldn't help but notice.
On the one hand, I'm inclined to cut the Obama administration slack for, first of all, doing what's "politically possible." But even if I'm sympathetic to the idea that it's a new administration feeling out what they can get done, and with what speed they can, it strikes me that Obama and the Democratic party do have goodwill on their side. They got the votes. And regardless of whatever stonewalling, name-calling, and funky stunts the opposition wants to use, they should not stand in the way of doing whatever is necessary to get us back on track. I appreciate the desire to be post-partisan and try to reach out, but stuff like ditching cap and trade and not putting any specifics in force on health care do make me--
Concerned. (I'm within an inch of shooting myself for even crossing into "concern troll" territory. I'm uncomfortable here. It's like wearing wet wool.)
Also, and again, I'm not an economist, just a vaguely educated anonymous blogger trying to break down stuff to where even I feel comfortable discussing it, the point of throwing the bidding to the market even if they are going to be backstopped with taxpayer dollars and even if the assets could be potentially inflated in value as a result, seems to be the nature of what an asset's real value is--the price is a relative measurement depending upon the bidder's frame of reference, and the idea is to make that measurement favorable enough to get the "nut" the banks in jeopardy need to continue operations. Taxpayer money is going to get thrown at them, regardless. By letting the industry in on the process, we get their cooperation, and, hopefully, some genuine scrutiny on their part. Which, hopefully, continues as we develop the framework for better regulation of this kind of market. One hand washes the other, in other words.
Not that I'm taking on Krugman's concerns. No, I lack the equipment to do that. Actually, what I noticed and want to say is, it is pretty neat that he kind of is arguing against the plan from "the Left" so to speak (and is apparently in good company, as I start to read around on it). More government involvement, capitulating to the necessity of nationalizaton of some entities, less reliance on the market, bigger stimulus and spending--all memes that need to be "out there" in the "marketplace of ideas" before they get introduced politically. If attention is being paid to what he's saying, it brings the Obama strategy into balance against the back-asswards cry of "OMG, it's teh Socialism!" coming from the right. It helps lay a foundation in the public mind for the possibility of a more liberal policy if needed.
I think it's a good thing.
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